Property Management Legal Issues 

Property Management Legal Issues

The best advice for legal issues is, "whenever possible, stay out of court!"  Why?  One word... expensive!  Taking a case to court can actually do a property management company more damage than good.  Unfortunately, there are cases where there is no other alternative than to go to court and plead your case. 

Legally, property management can be a very sticky industry.  Most of the time the legal issues arise from delinquent tenants, evictions, violations of the lease agreement, and discrimination offenses by the landlord.  After reading this article, you may want to read and fully understand the Fair Housing Laws article to know what you can do to avoid discrimination when leasing your rental property.  Fair Housing Law violations make up the majority of  court cases brought against landlords. However, tenants can bring you to court for almost anything. An injury on your property due to negligent maintenance issues, unfair withholding of security deposit, and theft of intellectual property are just a few examples of possible law suits against a property management company. 

There are many things a property management company can do beforehand to reduce the chances of going to court or losing a court battle.  In most cases, the party who loses a court case is liable to pay the winning parties legal expenses, which can be very costly. 

Tips on how to avoid going to court against a tenant:

         Properly train your staff.  There are right and wrong things you can say to a tenant; discrimination in property management and real estate is illegal.  Train your staff to deal with each objection that may arise with tenants.  Your staff should be trained so thoroughly that their responses are almost scripted to each and every objection.  Train your staff how to properly fill out paper work.  This is crucial.  In court, documentation is key.  If there are inconsistencies or errors in your paperwork, it could hurt your company in front of a judge. 

         Fix maintenance issues when they arise.  If there is a maintenance issue with a property, don't just sit on it and wait to fix it later.  If a tenant hurts themselves on your property because of the problem you haven't fixed, they could sue you for negligence.  It also looks good in court when a judge sees that your company has a track record of fixing problems in a timely manner. 

         Use Arbitration when possible.  If an issue escalates to the point of taking it to court, your property management company might want to consider settling the dispute out of court.  In most cases, arbitration can prove to be more lenient and less costly than filing a lawsuit.

Following these procedures and keeping proper documentation may not keep your company out of court, but proper documentation and following procedures and the law will definitely  help.

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